November 5, 2019
Disney CEO Bob Iger says he has no regrets licensing pay-TV rights to original movies for big dollars to Netflix and Starz.
Then came Disney+ and the rush to over-the-top video distribution.
Disney’s massive push to bridge the SVOD divide with Netflix (and Amazon Prime Video) through a branded SVOD service stocked with original movies and TV shows ran into legal challenges since many Disney movies were earmarked for competing distribution channels through pre-existing license agreements.
Thus, getting the company’s singular corporate initiative in 2019 to launch on time reportedly required some creative legal maneuvers behind the scenes.
Disney+ and ESPN+ will run banner ads for the Lionsgate owned Starz pay-TV and standalone SVOD service in exchange for exclusive streaming rights to Star Wars: The Force Awakens, among other titles.
The $6.99 Disney+ service had been touted as ad-free. And indeed, there will be no Starz advertising within Disney+ and ESPN+ platforms.
First reported by The Verge and confirmed by Disney, the banner ad will limited to the log-in page and is part of a revised license agreement enabling Disney+ to have access to original movies previously slated for Starz.
“I think as you can see from what we’re making available, and from seeing some of the titles that we’re making available at launch, there’s been a lot of effort that went into bringing it all back together so that we could make it available on the service,” Michael Paull, head of Disney streaming services, told The Verge in August.
“It’s clear that, from a library perspective, while there’s certainly a lot of volume, the recent studio slate will not fully be available at any one time because of the existing deals and it would take time for those rights, ultimately, to revert back to us,” Iger said last summer.
Agnus Chu, head of content at Disney+, contends license agreements can sometimes be split up “100 different ways.”
“Where it’s been licensed to, who it’s licensed to, and for how long, that gets very complicated,” he said.